Annual consumer price index reached 2.92% in December, marking a sharp rise from the 2.72% year-on-year increase registered a month prior. — The Jakarta Post
JAKARTA: Inflation in 2025 reached the highest level in three years, spurred by increasing prices for various food commodities but also for gold, as the precious metal reached record highs in a world marked by uncertainty.
Statistics Indonesia (BPS) official Pudji Ismartini revealed in a press conference on Monday that annual consumer price index (CPI) reached 2.92% in December, marking a sharp rise from the 2.72% year-on-year (y-o-y) increase registered a month prior.
She said the reading was “the highest” full-year figure since 2022. In 2022, inflation spiked to an unusually high 5.51%, partly due to an increase in government-set prices of subsidised fuels, which increased transportation and logistics costs.
The latest number is also higher than inflation was in 2021 (1.87%), 2023 (2.61%) and 2024 (1.57%).
One of the driving forces behind last year’s higher inflation were commodities belonging to the volatile foods component, which recorded inflation of 6.21% y-o-y.
The main commodities pushing inflation in the group were chili pepper, fresh fish, bird’s eye chili and rice, which together made up 0.63 of a percentage point in the year’s inflation figure.
Prices in the food, beverages and tobacco commodity group ended the year 4.58% higher and were the leading cause behind the higher headline inflation reading. However, in terms of single commodities, none contributed more than gold to last year’s inflation, as the precious metal single-handedly accounted for 0.79 percentage points of the overall 2.92% inflation figure.
Pudji said that gold was the main driver of month-to-month CPI growth in 11 out of 12 months in 2025, meaning its price rose almost consistently throughout the year.
Gold is universally perceived as a safe haven asset particularly sought after during uncertain times, and 2025 was among the most uncertain years in recent memory due to geopolitical conflicts and global trade disruption.
Israel’s war in Gaza and other conflicts in the Middle East featured prominently through much of 2025, while the war between Russia and Ukraine continued without a clear resolution.
However, the most significant source of economic uncertainty last year, according to several analysts, was a seismic shift in the global trade landscape brought about by steep increases in US import tariffs soon after US President Donald Trump took office for a second term in January. —The Jakarta Post/ANN
